Standard &
Poor’s communicated on Thursday that with Fiat's financial
position improving it has raised its rating on the Group's
long-term debt from “BB+” to “BBB-“ thus moving the Italian
firm into the important 'investment grade' status category.
S&P added that it was raising short-term rating from “B” to
“A3” and that the outlook is stable.
"It
successfully renewed the Fiat
brand product range and attained its targeted sales for the
new models," said S&P in a statement. "The upgrade reflects
Fiat's improvement trend in operating performance, cash
generation, and debt reduction over the past three years,
with all of the main businesses having strengthened
significantly," it added.
The credit
rating agency reiterated that Fiat
had announced a 5.1 pct consolidated trading margin for the
first quarter of 2008, compared to 4.4 pct a year earlier,
and that Fiat Group Automobiles had turned in a trading
margin of 3.8 percent at the end of last year compared to
1.7 pct in 2006. This was the second major boost to Fiat's
improving credit rating scores after agency Fitch Ratings
upgraded the carmaker last year.
S&P also
conferred the same improved rating score onto the Group's
agricultural and construction equipment division, CNH
Global. "Because we view CNH as core to the
Fiat Group, a positive or
negative rating action on Fiat
would result in the same action on CNH," said S&P's credit
analyst Dan Picciotto.
"We are
extremely pleased at Standard & Poor's decision to raise the
rating of Fiat and CNH to investment grade, showing
recognition for the work we have done to achieve this
result," said Fiat Group CEO Sergio Marchionne. "All of the
targets set by the Group have been reached and, in some
cases, exceeded. The upgrade from Standard & Poor’s, which
follows a similar upgrade from Fitch in June last year,
further strengthens our commitment to reaching the important
targets which we have set for the future."
